Expansionary and Contractionary Gaps

(See attached file for full problem description with diagram)

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17. (Expansionary and Contractionary Gaps) Answer the following questions on the basis of the graph on the next page:

a. If the actual price level exceeds the expected price level reflected in long-term contracts, real GDP equals ______ and the actual price level equals ______ in the short run.
b. The situation described in part (a) results in a(n) ______ gap equal to ______.
c. If the actual price level is lower than the expected price level reflected in long-term contracts, real GDP equals ______ and the actual price level equals ______ in the short run.
d. The situation described in part (c) results in a(n) ______ gap equal to ______.
e. If the actual price level equals the expected price level reflected in long-term contracts, real GDP equals ______ and the actual price level equals ______ in the short run.
f. The situation described in part (e) results in ______ gap equal to ______.
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